An idea that I have been kicking around in my head for some time now is that of cloud peering. This idea comes from the networking context whereby big ISPs will negotiate a peering agreement that allows customers on the two networks to communicate with each other. While the big ISPs are cut-throat competitors they understand that if they do not work together that the Internet would turn into large islands where customers can only communicate to others on their island.

Peering involves two networks coming together to exchange traffic with each other freely, and for mutual benefit. This 'mutual benefit' is most often the motivation behind peering, which is often described solely by "reduced costs for transit services". Other less tangible motivations can include:

Increased redundancy (by reducing dependence on one or more transit providers).

Increased capacity for extremely large amounts of traffic (distributing traffic across many networks).

Improved perception of your network (being able to claim a "higher tier").

Ease of requesting for emergency aid (from friendly peers).

Are those not things that every cloud infrastructure provider would love to have more of? More redundancy/capacity/performance seems compelling to me.

The way I would envision such a system working would be for two infrastructure providers to agree to provide free bandwidth between their clouds. For why this is important, think about the cloud today. When trying to transfer data between clouds what ends up happening is you charged going in both directions (i.e. out of one cloud, into the other). Say for example you were running an application in the Rackspace cloud but doing nightly DB backups to S3 for redundancy, you would end up paying 22 cents/gig to Rackspace for the outbound traffic and another 15 cents/gig for traffic into S3. At 37 cents/gig you could quickly start racking up a nice bill just for bandwidth. Cloud peering could alleviate a lot of this cost while attracting more customers to the cloud by reducing the concern over lock-in and outages.

This strategy seems particularly attractive for some of the smaller players which are looking to grow market share. It will be interesting to see if anything like this develops in the future.